Seven startup and venture capital associations within the tech sector including All Raise, Diversity VC, BLCK VC, StartOut, 2Gether-International, Vets in Tech, and Somos VC have joined forces to standardize the collection and sharing of data.
The aim of this move is to promote data transparency and facilitate the tracking of funding distribution, shedding light on potential inequalities within the tech startup landscape.
Through this initiative, a shared standard for data management is being established, marking an industry first that could drive positive change and enhanced diversity.
The organizations have formed the Diversity Data Alliance to establish a systematic method of collecting data about founders and funders, and to monitor funding trends in the tech startup industry.
Tech alliances aim for data transparency
This initiative will also address concerns about the potential distortion of disclosed information without proper insight into its origin.
This is a significant move for marginalized founders who often struggle to access venture capital, as the Alliance intends to use collected data to devise strategies to channel more funding to underrepresented founders.
Concurrently, they plan to publish a unified data report while also ensuring improved privacy and security standards.
The move towards standardization of data collection was implemented in the spring and has already seen marked improvement in efficiency and data accuracy.
Sarah Millar, COO of Diversity VC, asserts that the combined data collection and analysis enables greater allocation of resources to beneficial programs, supporting innovation and diversity within the venture capital industry.
The Alliance insists that firms use the same intake form for founders, detailing personal information like race, educational background, disability status, and military affiliation.
This ensures data collection standards are met across the board and and maintains consistency in the data collection process.
This push for increased data transparency comes aligned with upcoming Californian legislation requiring demographic breakdowns of invested founders in an effort to better comprehend disparities in funding.
Any method to measure capital allocation and its disparities should shed light on the financial landscape and help promote equitable distribution of resources.
The Alliance remains hopeful that other firms will join them in promoting data transparency.
Paige Hendrix Buckner, CEO of All Raise, highlighted the importance of uniformly collecting demographic information in order to better understand and improve the venture and startup ecosystem.
Furthermore, such transparency could also influence decision-making processes in organizations, driving them toward more equitable operations.
